WAIC 2026 shows rising opportunities in humanoid robots, while auto parts suppliers also face stronger competition and talent pressure

Overview

This report is Morgan Stanley's review of the implications of WAIC 2026 for auto parts. The core conclusion is that the humanoid robot theme provides a new growth narrative for auto parts suppliers, but industry opportunities are not without barriers: suppliers need to make more refined judgments on client selection, product differentiation, R&D resource allocation, and talent incentives.

Core views

The report believes auto parts suppliers are relatively well-positioned to enter the humanoid robot sector because they can reuse existing R&D, CNC processing equipment, and material procurement channels. However, as the number of exhibited robots increases, the leading clients are not yet fully clear, and it remains difficult for suppliers to win orders from top-tier clients such as Tesla and Unitree; at the same time, many companies are expanding from single components into multi-product lines such as joints, dexterous hands, limbs, and sensors, and product homogenization may intensify competition. In the near term, earnings of auto parts companies in 2Q/1H26 may also be dragged down by automaker price cuts, rising material costs, higher social security contributions, and foreign exchange losses.

Analysis framework

The report combines conference observations, supply chain capability comparisons, profitability pressure assessments for covered companies, and a single-stock valuation framework. It first identifies humanoid robot industry trends through changes seen at the WAIC exhibition, then maps them to the effects on orders, products, talent, and profitability for auto parts suppliers, and finally supports its stock preference using Minth Group Limited's rating, target price history, and DCF assumptions.

Methodology notes

• Valuation methodsDCF

  discounted cash flow valuation

  Minth Group Limited's base-case valuation is derived from DCF, with key assumptions including a 13% WACC, 15.3% cost of equity, 6.3% cost of debt, 9% mid-term growth rate, and 3% terminal growth rate.

• rating_frameworkMorgan Stanley Relative Rating System

  relative rating system

  Morgan Stanley uses relative ratings such as Overweight, Equal-weight, Not-Rated, and Underweight to assess risk-adjusted performance relative to the average total return of the analyst's industry coverage over the next 12-18 months.

• industry_viewMorgan Stanley Industry View

  industry view

  Industry views include Attractive, In-Line, and Cautious. This report discloses an In-Line industry view for China Autos & Shared Mobility.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Minth Group Limited (0425.HK)

  core preferred target

  Strengths

  It has exposure to the humanoid robot theme, while the report believes its FY26 double-digit year-on-year growth guidance can support valuation; the DCF base-case target price assumptions are clearly defined.

  Weaknesses

  It is still affected by near-term earnings pressure in the auto parts industry, overseas sales performance, and labor costs.

  Comparison

  Compared with suppliers that only have a robot narrative but unstable earnings, Minth is viewed by the report as a better choice combining both thematic exposure and earnings support.

  Risks

  Downside risks include a significant long-term slowdown in China's PV market, weak overseas sales growth, and rising labor costs.

• Tesla (TSLA.O)

  reference for potential top-tier robot clients

  Strengths

  The report lists it as one of the leading clients suppliers hope to win, representing an opportunity for high-quality customer orders.

  Weaknesses

  It remains difficult for auto parts suppliers to win orders from top-tier clients such as Tesla.

  Comparison

  Orders from top-tier clients are more strategically valuable than those from small-volume clients, but competition and entry barriers are also higher.

  Risks

  If suppliers invest too much upfront R&D and capacity into small-volume or uncertain clients, the return on resources may be lower than alternative uses.

• Chinese auto parts suppliers

  industry group benefiting but facing competitive pressure

  Strengths

  They can reuse existing R&D, CNC processing equipment, and material procurement channels, making the upfront investment to enter robot-related business relatively low.

  Weaknesses

  Product portfolios are becoming more similar, client selection is getting harder, and R&D talent may be attracted away by highly valued humanoid robot startups.

  Comparison

  Compared with pure robot startups, traditional auto parts companies have stronger manufacturing and supply chain foundations; but compared with leading robot integrators, they have weaker client bargaining power and product-definition capability.

  Risks

  In 2Q/1H26, they may be dragged down by OEM price cuts, rising raw material costs, higher social security contributions, and foreign exchange losses.

Key data

• Conference dates2026-07-17 至 2026-07-20WAIC 2026 was held in Shanghai.
• Number of humanoid robots exhibited300+The report states that 300+ units were exhibited this year, up from 150+ last year.
• Minth Group Limited ratingOverweightThe report identifies 0425.HK as a more preferred target under the humanoid robot theme.
• Minth Group Limited current priceHK$26.80The table discloses a price date of 2026-07-20.
• Minth Group Limited latest target price historyHK$51The target price history shows 51 on 2026-06-15.
• DCF WACC13%Including a 15.3% cost of equity and a 6.3% cost of debt.
• Mid-term growth rate assumption9%Used in Minth Group Limited's DCF base case.
• Terminal growth rate assumption3%Used in Minth Group Limited's DCF base case.
• FY26 earnings guidancedouble-digit year-on-year growthThe report states that Minth management guided for double-digit year-on-year growth in FY26.

Impact & implications

For investors, the humanoid robot theme can improve the long-term upside narrative for some auto parts companies, but short-term earnings pressure and changes in the competitive landscape make stock selection more important. Companies with reusable manufacturing capabilities, lower upfront investment requirements, clear client breakthroughs, and a stable earnings base are more likely to receive valuation support; companies lacking differentiated products, unable to secure orders from top-tier clients, or with insufficient talent incentives may face uncertainty in investment returns.

Risks

• The competitive landscape among humanoid robot integrators is not yet clear, making it difficult for suppliers to judge which clients will become clear leaders.
• It remains difficult to win orders from leading clients such as Tesla and Unitree, and small-volume clients may not be able to cover the opportunity cost of upfront R&D and capacity.
• Suppliers' product portfolios are rapidly converging from joints and dexterous hands to limbs and sensors, which may intensify competition.
• Humanoid robot startups are obtaining VC/PE funding at high valuations, which may increase pressure on auto parts companies through R&D talent attrition.
• Auto parts earnings in 2Q/1H26 may be affected by OEM price cuts, rising material costs, increased social security contributions, and foreign exchange losses.
• Minth's downside risks include a significant long-term slowdown in China's PV market, weak sales growth in overseas markets, and higher labor costs.

What to watch

• Whether the landscape of leading humanoid robot clients and integrators becomes clearer after WAIC.
• Whether auto parts suppliers can secure orders from Tesla, Unitree, or other high-quality clients.
• Whether supplier product portfolios continue to homogenize, and whether price competition spreads to robot components.
• Whether auto parts companies retain R&D talent by spinning off internal humanoid robot teams or through equity incentives.
• Whether Minth's FY26 double-digit year-on-year growth guidance is delivered.
• Progress in new projects and new clients for aluminum battery housing products, as well as the pace of overseas market expansion.